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Silver prices fell over 3% on Monday as the US Dollar gained strength amid rising geopolitical tensions in the Strait of Hormuz. The bearish engulfing pattern on technical charts has drawn attention to the $70 level as a critical support target. Silver (XAG/USD) traded at $72.74 at the time of writing after hitting a high of $76.00 earlier in the session. The decline was driven by safe-haven demand for the US Dollar as investors reacted to US-Iran military posturing and the launch of 'Operation Freedom' by the US Navy.
The sharp drop in silver highlights the sensitivity of commodities to geopolitical risks and currency movements. A breakdown below $70 could trigger further technical selling, while a rebound above $76 may signal a reversal of the current bearish trend. Traders are closely monitoring the Dollar's performance and potential military developments in the Middle East, which could amplify volatility in silver and other metals.
For MENA investors, the situation underscores the importance of hedging against geopolitical shocks and Dollar fluctuations. The Strait of Hormuz accounts for 20% of global oil exports, and any disruption there could ripple through energy and commodity markets. Key watchpoints include the Dollar Index, Iranian naval activity, and US military statements. Technical indicators suggest a high probability of continued downward pressure if the $70 level fails to hold.
